Addressing the 55th annual general meeting (AGM) of Berkshire Hathaway on May 2, Warren Buffett said what many probably wanted to hear from him — nothing can stop the United States.
The 89-year-old “Oracle of Omaha” acknowledged that the novel coronavirus pandemic could have a wide range of impacts on the economy and his investments, but emphasised that US will overcome the challenges.
Buffett dragged people's attention to the crises of Great Depressions, the civil wars and Cuban Missile Crisis, 9/11 and said that US had emerged stronger every time.
He further emphasised that the 'American miracle' was intact and urged investors to never bet against the country.
However, he also cautioned that there is always an element of uncertainty in the market and while one can bet on the US, they must be careful about their bets.
Berkshire Hathaway’s AGM is an event that investors across the world wait for. The meeting was held virtually for the first time due to the COVID-19 pandemic. It was streamed by Yahoo Finance.
The company was hit by the outbreak, posting a record quarterly net loss of nearly $50 billion on May 2, highlighting that the performance is suffering in several major operating businesses.
According to a Reuters report, Berkshire said most of its more than 90 businesses are facing “relatively minor to severe” negative effects from COVID-19, the illness caused by the novel coronavirus and now punishing the global economy, with revenue slowing considerably in April even at businesses deemed “essential.”
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While quarterly operating profit rose 6 percent, several larger businesses including the BNSF railroad posted declines.
In the AGM, Buffett said he was wrong about valuing airline stocks and revealed that Berkshire had dumped its entire airline stake.
Buffett underscored that the world had changed after the pandemic for the airline industry.
“The world has changed for the airlines. And I don’t know how it’s changed and I hope it corrects itself in a reasonably prompt way,” he said.
“I think there are certain industries, and unfortunately, I think that the airline industry, among others, that are really hurt by a forced shutdown by events that are far beyond our control,” he added.
Berkshire has been among the biggest shareholders in the four largest US airlines — American, Delta, Southwest and United.
Buffett has not made a big acquisition in the last few years despite Berkshire's huge cash pile. He said he intended to do it, but was not able to find anything attractive.
Charlie Munger and Ajit Jain did not attend the AGM.
Buffett said Munger is in good health and he will return to the annual meeting next year. Buffett was joined by Vice Chairman Greg Abel Abel who lives closer to Omaha than Munger and Jain.
Abel oversees Berkshire’s non-insurance businesses. He is considered to be the top candidate who will eventually succeed Buffett as chief executive officer. Ajit Jain who manages Berkshire’s insurance businesses is also considered to be a leading candidate to be the company's next CEO.